Yurman Inc. uses a job-order costing system. During the month of May, the following transactions occurred: May 1 Purchased materials on account for $29,680. 3 Requisitioned materials totaling $24,480 for use in production. Of the total, $9,220 was for Job 58, $8,940 for Job 59, and the remainder for Job 60. 31 Incurred direct labor for the month of $28,800, with an average wage of $16 per hour. Job 58 used 790 hours; Job 59, 590 hours; and Job 60, 420 hours. 31 Incurred and paid actual overhead of $17,860 (credit Various Payables). 31 Charged overhead to production at the rate of $4.70 per direct labor hour. 31 Completed and transferred Jobs 58 and 59 to Finished Goods. 31 Sold Job 57 (see beginning balance of Finished Goods) and Job 58 to their respective clients on account for a price of cost plus 40%. Beginning balances as of May 1 were: Materials $2,350 Work in Process 0 Finished Goods (Job 57) 25,550 Required: 1. Prepare journal entries for transactions from May 1 through 31. 2. Prepare brief job-order cost sheets for Jobs 58, 59, and 60. 3. Calculate the ending balance of Raw Materials. 4. Calculate the ending balance of Work in Process. 5. Calculate the ending balance of Finished Goods. CHART OF ACCOUNTS Yurman Inc. General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Supplies 132 Prepaid Insurance 141 Raw Materials 142 Work in Process 143 Overhead Control 144 Finished Goods 170 Land 180 Equipment 181 Accumulated Depreciation LIABILITIES 210 Accounts Payable 220 Wages Payable 230 Various Payables EQUITY 310 Common Stock 320 Retained Earnings Amount Descriptions Applied overhead Direct labor Direct materials Total
Yurman Inc. uses a job-order costing system. During the month of May, the following transactions occurred: May 1 Purchased materials on account for $29,680. 3 Requisitioned materials totaling $24,480 for use in production. Of the total, $9,220 was for Job 58, $8,940 for Job 59, and the remainder for Job 60. 31 Incurred direct labor for the month of $28,800, with an average wage of $16 per hour. Job 58 used 790 hours; Job 59, 590 hours; and Job 60, 420 hours. 31 Incurred and paid actual overhead of $17,860 (credit Various Payables). 31 Charged overhead to production at the rate of $4.70 per direct labor hour. 31 Completed and transferred Jobs 58 and 59 to Finished Goods. 31 Sold Job 57 (see beginning balance of Finished Goods) and Job 58 to their respective clients on account for a price of cost plus 40%. Beginning balances as of May 1 were: Materials $2,350 Work in Process 0 Finished Goods (Job 57) 25,550 Required: 1. Prepare journal entries for transactions from May 1 through 31. 2. Prepare brief job-order cost sheets for Jobs 58, 59, and 60. 3. Calculate the ending balance of Raw Materials. 4. Calculate the ending balance of Work in Process. 5. Calculate the ending balance of Finished Goods. CHART OF ACCOUNTS Yurman Inc. General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Supplies 132 Prepaid Insurance 141 Raw Materials 142 Work in Process 143 Overhead Control 144 Finished Goods 170 Land 180 Equipment 181 Accumulated Depreciation LIABILITIES 210 Accounts Payable 220 Wages Payable 230 Various Payables EQUITY 310 Common Stock 320 Retained Earnings Amount Descriptions Applied overhead Direct labor Direct materials Total
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
Yurman Inc. uses a job-order costing system. During the month of May, the following transactions occurred:
| May | 1 | Purchased materials on account for $29,680. |
| 3 | Requisitioned materials totaling $24,480 for use in production. Of the total, $9,220 was for Job 58, $8,940 for Job 59, and the remainder for Job 60. | |
| 31 | Incurred direct labor for the month of $28,800, with an average wage of $16 per hour. Job 58 used 790 hours; Job 59, 590 hours; and Job 60, 420 hours. | |
| 31 | Incurred and paid actual |
|
| 31 | Charged overhead to production at the rate of $4.70 per direct labor hour. | |
| 31 | Completed and transferred Jobs 58 and 59 to Finished Goods. | |
| 31 | Sold Job 57 (see beginning balance of Finished Goods) and Job 58 to their respective clients on account for a price of cost plus 40%. |
Beginning balances as of May 1 were:
| Materials | $2,350 |
| Work in Process | 0 |
| Finished Goods (Job 57) | 25,550 |
| Required: | |
| 1. | Prepare |
| 2. | Prepare brief |
| 3. | Calculate the ending balance of Raw Materials. |
| 4. | Calculate the ending balance of Work in Process. |
| 5. | Calculate the ending balance of Finished Goods. |
| CHART OF ACCOUNTS | ||||||||||||||||||||||||||||||||||||||
| Yurman Inc. | ||||||||||||||||||||||||||||||||||||||
| General Ledger | ||||||||||||||||||||||||||||||||||||||
|
Amount Descriptions
Applied overhead
Direct labor
Direct materials
Total
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